Mount Holyoke preps bond sale for new facility

Mount Holyoke College is preparing a $30 million bond sale to finance the construction of a new public-safety facility as well as other capital projects on its campus in South Hadley.

The all-women’s college has set a June 21 sale date for the fixed-rate bonds; the securities are being issued on behalf of Mount Holyoke by the Massachusetts Development Finance Agency.

The new facility is scheduled to open later this year and is slated to include administrative offices and other amenities required by campus police and security officials.

The bond sale and construction project come at a challenging time for the college, which saw tuition revenue per student decline by 4.3 percent to $1,861 last year. Meanwhile, the school’s average tuition-discount rate increased to 51 percent last year, versus 43.9 percent in 2009, according to a recent analysis by Moody’s Investors Service.

Moody’s said the tuition pressures stem from red-hot competition among other women’s colleges as well as surrounding coed schools such as the University of Massachusetts, Amherst.

Other revenue sources include investment income (25.3 percent of total revenue) and gifts (9.3 percent), both of which have proven resilient over the past two years. For example, after posting a 20 percent decline in its investment portfolio in fiscal 2009, Mount Holyoke recorded a 10.1 percent rebound in fiscal 2010. Likewise, investment returns were up 18.4 percent for the current year through April 30.

Annual gift revenue has averaged $26 million since 2008, and Mount Holyoke is roughly two-thirds of the way to hitting the $300 million threshold for a fundraising campaign launched in 2006. The school said half of the amount raised in its capital campaign will be applied to its endowment.